Harsh Economics and Natural Fiber Welding’s Collapse: Investors, Brands Should Share Blame

Natural Fiber Welding (NFW) was hailed as the future of sustainable materials. But after years of bold promises, high-profile partnerships and repeated restructuring, there seems no future.

The US company, lauded worldwide for its plant-based leather alternative Mirum, had attracted investors from BMW i Ventures to Ralph Lauren, and at its peak closed an US$85 million Series B in 2022 to scale production. The company made waves again as an Earthshot Prize finalist. Yet, this week, its board authorised an orderly wind-down, with just 15 employees left and county officials confirming a taxpayer-backed line of credit had been tapped to cover cashflow.

NFW’s collapse has dealt a blow to fashion sustainability, but its story is not merely of a startup that began with a bang and ended in a whimper. It is a cautionary tale about how the fashion treats climate-tech suppliers: celebrated for their breakthroughs, paraded in glossy campaigns, then quietly abandoned when the industrial economics prove more difficult than anticipated. NFW’s journey — from lauded innovator to serial layoffs and boardroom upheaval—illustrates both management failings and systemic flaws in the way new materials are funded, validated and scaled. Or, not.

Trouble began in 2023, when reports emerged of layoffs despite the hype about brand collaborations. By late 2024, founder Luke Haverhals was forced out as CEO amid another round of mass redundancies. His replacement, Steve Zika, inherited a company under severe financial strain, with bridge financing delayed and customer contracts failing to close. A third wave of restructuring in May this year confirmed what insiders perhaps already knew: NFW was living on borrowed time.

The final months revealed the full extent of the crisis. NFW drew down roughly US$1 million from a county-backed credit line as investors refused to supply fresh capital. This reliance on public financing to cover payroll and operations underscores the depth of its liquidity crunch. And, the narrative invariably shifted from saving jobs to salvaging intellectual property.

For an industry still clinging to “next-gen” materials as proof of progress on sustainability, the implosion of NFW poses disconcerting questions: Were the signs ignored for too long? Did investors and brand partners overhype a product they were never willing to back at scale? And most critically — who takes responsibility when the promise of innovation collapses into another line item of green disappointment? Someone needs to answer these questions, and own up responsibility.

The implosion of Natural Fiber Welding cannot be pinned on a single actor. It was the outcome of compounded failures: management missteps, investor retreat, and an industry that revels in sustainable storytelling while avoiding industrial risk. Each group played its part in steering a once-celebrated innovator into crisis.

Founder Luke Haverhals, a scientist by training, built the company’s profile on the back of Mirum’s promise. Charismatic and confident, he often presented the company’s scaling prospects in unqualified terms. As late as 2024 he insisted the ability to expand was “limited only by production capacity,” a claim that, given what followed months later, revealed both overconfidence and a disconnect from reality. (source).. When he was finally removed as CEO in November 2024, the timing was catastrophic: the company was in the middle of fragile negotiations for bridge financing. His successor, Steve Zika, inherited not a turnaround opportunity but a hospital pass. The churn at the top only deepened investor scepticism and undermined staff morale.

But management alone cannot shoulder all blame. Investors — including strategic backers such as BMW i Ventures — were instrumental in driving NFW’s rapid expansion, yet retreated when the economics turned against them. After the fanfare of a US$85 million raise in 2022, no comparable capital was forthcoming when manufacturing targets slipped and customer contracts stalled. The board’s decision in September 2025 to authorise an orderly wind-down was, in effect, an admission that investors no longer believed the company could be saved. Before that point, Steve Zika had attempted a strategic pivot, abandoning full-scale manufacturing in favour of licensing “proprietary intermediates technology” — a tacit acknowledgement that the original roll-to-roll model had collapsed. The failure of this pivot sealed the company’s fate. The responsibility here lies in governance: they helped engineer the hype, then declined to fund the messy middle of industrial scaling.

Equally culpable are the fashion and automotive brands that paraded Mirum as a green badge without making binding commitments. Stella McCartney, Ralph Lauren, and others incorporated the material into runway collections and capsule launches, but these remained symbolic gestures. When NFW needed anchor contracts — long-term purchase agreements guaranteeing minimum volumes — the same brands were conspicuously absent. In practice, they leveraged sustainability optics while leaving the financial and industrial risks entirely with the supplier. This dynamic mirrors what analysts call a “bet-and-bury” approach: brands and investors make high-profile investments, reap the public-relations upside, and then quietly retreat when scaling proves difficult.

Finally, responsibility must be shared by the wider sustainability ecosystem. Industry bodies, trade media and even prizes like the Earthshot Prize elevated NFW as a poster child for climate solutions. Such accolades created an aura of inevitability around its success, discouraging scrutiny of its actual unit economics or manufacturing challenges. By uncritically amplifying optimistic narratives, the ecosystem contributed to a culture where uncomfortable questions about scale and cost were sidelined.

In sum, the collapse was systemic. A charismatic founder sold the vision; investors chased headlines but withheld patience; brands reaped the PR without assuming risk; and the sustainability community basked in the story. The result was predictable: a company praised to the skies until the moment it was left to crash.

The pattern reflects a deeper “bet-and-bury” culture in fashion and automotive: innovators are championed in glossy campaigns, then sidelined once scaling demands capital and commitment. The inconsistency between rhetoric and responsibility is one of the most corrosive forces undermining material innovation today.

The failure of Natural Fiber Welding is more than a corporate obituary. It is a warning for an industry that has built its sustainability narrative on fragile foundations — and for investors who assumed climate-tech materials could be funded like software start-ups. NFW’s collapse will likely chill venture capital appetite for deep-tech, with future funding contingent on firmer proof of commercial traction and shorter paths to revenue. For over a decade, “next-gen” materials have been promoted as the antidote to plastics and animal leather, yet the sector has repeatedly underestimated the brutal economics of scaling. NFW’s demise shows what happens when optimism, investment, and marketing outrun industrial reality.

First, the collapse delivers a credibility shock to plant-based leather alternatives. Brands have marketed Mirum and its peers as proof that fashion is turning away from petrochemical synthetics. Yet as Stella McCartney’s quiet retreat from Mirum illustrates, enthusiasm is no substitute for scale. When one of the most high-profile sustainable designers cannot make a supplier relationship work, scepticism across the sector is inevitable. For emerging material innovators, this means tougher fundraising, longer pilot phases, and closer scrutiny of lifecycle claims.

Second, NFW’s fate underscores the need for risk-sharing between brands and suppliers. Fashion houses have been eager to showcase prototypes in runway collections but reluctant to sign multi-year purchase agreements that underpin factory economics. Without such commitments, material start-ups remain stuck in a death spiral: they need contracts to attract capital, but they need capital to deliver contracts. Breaking this cycle will require brands to co-invest in capacity, accept higher costs in the early years, and recognise that industrial transformation cannot be achieved on a marketing budget alone.

Third, the case highlights the shortcomings of the venture-capital model when applied to heavy industry. Investors are conditioned to expect rapid scaling and quick exits, but manufacturing breakthroughs often demand years of iteration and billions in capex. NFW’s reliance on local taxpayer-backed credit to cover operations was the clearest signal that private capital had walked away. If sustainability breakthroughs are to survive beyond the lab, they will need hybrid financing models: venture money blended with industrial partners, government guarantees, and longer time horizons. Absent such support, start-ups face what analysts call the “performance–sustainability dilemma” — materials are often too costly or underperforming to secure orders at scale. Add to this weak consumer willingness to pay more and the lack of regulatory drivers such as carbon pricing or extended producer responsibility, and the ecosystem itself becomes a hostile environment for genuine innovation.

Finally, NFW’s collapse feeds a growing backlash against greenwashing. Consumers and activists are increasingly alert to the gap between glossy sustainability claims and operational reality. When brands promote experimental materials in capsule launches but fail to sustain them, the credibility of the entire movement suffers. That damage is not limited to one company; it undermines trust in the industry’s broader climate commitments.

None of this means the promise of plant-based materials is dead. The science behind Mirum remains compelling, and the intellectual property may yet resurface under different ownership. But the lessons are stark: technology alone cannot deliver a sustainable future. Without realistic economics, long-term contracts, and aligned risk-taking, the next “miracle material” will face the same fate. NFW’s downfall should not be seen as an isolated misstep — it is the symptom of an industry unwilling to confront the true costs of its transition. Unless risk is genuinely shared, the next “miracle material” is already destined for the same fate.